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Inside Self-Storage 10/98: Records Management and Storage

Records Management and Storage Increasing revenue with little or no start-up cost

By Cary F. McGovern

Abstract: The most frequently asked question that I encounter as a records-storage
consultant is, "Is it possible to provide records-management services in a
self-storage facility with no added costs to my existing operation?" For a long time
I thought that the answer was "no." But new methods and technology have changed
that answer to an emphatic "yes." I not only recommend it, but have knowledge of
the method.

Over the past 22 years, I have assisted more than 100 entrepreneurs in assessing,
organizing and developing commercial records management and storage centers throughout the
United States and Canada. I have always believed that the records-storage business was
capital intense and required a specific set of financial rules. Today, new technology and
simpler business practices have enabled that to be a thing of the past.

Recently at an Inside Self-Storage Expo, I was pummeled with questions from folks
that had a different point of view than mine. They said, "I want to do records
differently. I want to do records management within my existing operation. Can I do that
with little or no new capital expense?" I returned to my office with a quest: find a
way to provide records-management services from this different perspective.

It first occurred to me that we have new tools and resources available that have
until just recently never existed before. It took me more than a month to work out the
details, but I assure you it can work and, at the same time, provide higher storage
revenue.

The Goal:To provide the methods and resources for self-storage operators to
offer two levels of services without added facilities, personnel and computer systems at
their existing self-storage facilities. The two levels of services are named here for
reference purposes only, as records storage and records management. Each has a different
requirement and scope of services.

Records-Storage Services:To provide self-storage operators the ability to offer professional
records storage to existing or new customers who want to provide their own retrieval
services. This method can allow the operator to improve storage revenue by as much as
2.5 times current unit revenue with little or no additional cost. It also provides the
operator with new revenue sources to support the records-storage option.

Records-Management Services: To provide records storage and a specified level of records-management
services to customers who want the self-storage operator to provide basic
records-management retrieval and inventory-control services. The services can include
retrieval, delivery, pick-up, re-file, indexing, and an automated management
inventory-control system, accessible to both the customer and operator.

The Problem to OvercomeSeveral problems existed to solve. I realized that in a traditional
records-management operation there are some key components to long-term success that would
not exist in a self-storage operation. The following is a list of items that need
consideration for records management in a conventional self-storage facility:

Low ceiling heights within existing self-storage units.

Racking-design optimization and cost reduction.

Use of existing software.

No vehicle requirement for pick-ups and deliveries.

No additional personnel requirements.

A simplified set of business processes that ensure control.

Each of these seemed formidable initially but, with a some work, we have solved each of
the problems. Let's look at each one separately:

Low ceiling heights within existing self-storage unitsRemember that in a traditional commercial records-storage operation, the
ceiling heights go up to 25 feet high. The typical self-storage unit is only 8 or 9 feet
high. The key here is optimization of space. If you can't go higher, you must deal with
the density issues within your space by designing for optimum density. Remember, records
storage requires racking, whether it is for box or file storage.

The right optimization plan can net 2.5 times the current revenue per square foot while
changing the way a facility charges customers, from the storage unit itself to per cubic
foot or per box being stored.

Racking-design optimization and cost reductionRacking costs in a traditional records-center operation can equal 75 percent of
the first year's storage revenue. You must use proper racking or your storage plan really
cannot work. Quick access to files or boxes is a primary component of management control.
In an existing self-storage facility, each unit has a smaller "footprint," but
we do not recommend that you utilize any unit smaller than 10-by-10 feet for records
management. There are shelving designs that optimize the space of industry-standard
storage units. You can build out only one unit at a time with leasing plans available.

Use of existing software Believe it or not, this was the toughest issue for us to deal with. Most
records-storage software systems, by the time you consider training, installation,
equipment and maintenance, can cost more than $20,000. My concept provides a
transaction-based software that requires no initial cash outlay and requires only a PC
with Internet access. You can bill your customer for each transaction and the software
vendor is paid a small part of each transaction fee for software access. The software also
provides monthly summary billing information.

No vehicle requirement for pick-ups and deliveriesCouriers and taxis have long been used in the records-storage industry for
overflow and "STAT" deliveries of one hour or less. It is reasonable to
construct an agreement with a local courier to provide all or most of your required
material handling services.

No additional personnelYour existing staff can perform all of the activities if you plan it right.
Accounting and billing can be provided utilizing the transaction-based system and through
existing accounting services. Retrieval requests can be fulfilled by your site manager and
your courier.

Simplified business processesDiscipline is the key to any inventory-control system. Business processes for
records management in a self-storage operation must be simple, straightforward and easy to
follow. In order to provide the control you need with limited functionality, it is
imperative that interactive prompting and training is designed into each work process.

ConclusionSure, the services that you will offer are smaller in scope than in
full-service records-storage centers, but it can deliver an increase in storage revenue
and add new service revenue with little or no cost. FileMan is developing a comprehensive
package of services that can provide solutions to these problems.